Ecuador aims to protect citizens from violent groups that reside in and around its borders, but does not plan on combating those elements with force, according to Fernando Bustamante, Ecuador’s interior minister. “The Uribe approach to solving the war is not the right one,” said Bustamante, speaking at a Council of the Americas event in New York on Monday. The official says the Correa administration’s approach to maintaining stability is to use “preemptive peace, not preemptive violence.” Bustamante also notes that Ecuador is part of an ongoing effort to develop a South American security system operating independently of the US, adding that such an effort would enhance the region’s ability to independently cooperate with the US.
Category: Regions
Posted inDaily Brief
Boliva Completes Transredes Nationalization
Bolivia has confiscated the half it did not own of pipeline company Transredes, after failing to reach a share buyback agreement with partner Ashmore, state news agency ABI reported. The sovereign had taken over the 51% of Transredes on May 1. AIG-GE Latin America Infrastructure Fund (LAIF) sold its 9.7% stake in Transredes for $46.6m on April 24 to YPFB, the Bolivian state-owned oil company.
Posted inDaily Brief
Panama Reopens Bonds, Tees Up Swap
Panama has launched a two-step liability management exercise. On Monday it reopened its 2015 bonds, and today the sovereign plans to reopen its 2029 vintage, offering the notes to holders of its 2011 and 2012 issues. The sovereign priced Monday $235m of the 7.25% 2015, at 109.564, to yield 5.533% or 10-year UST plus 158bp. The 2015s, which have an average life 6.8 years, closed Monday’s session at 110.350, according to people close to the trade. The reopening adds to the $913m outstanding and provides funds for general budgetary purposes. In a separate transaction launching today, Panama is offering to exchange existing 9.625% 2011 and 9.375% 2012 bonds for reopened 9.375% 2029s, in a bid to move investors to a more liquid point on its curve. The 2011 notes will be repurchased at a spread of 107bp over equivalent US treasuries, while the 2012s will be exchanged at a spread of 94bp. The 2011s bid Monday at around 112.75 (UST+ 110bp) and the 2012s at 116.8 (UST+ 162bp), according to a trader away from the deal. Up to $500m in 2029 bonds will be reopened at a spread of 168bp over UST due 2038. The 2029s bid Monday at 134.90 (UST+162bp), according to a trader away from the deal. Holders will also receive a cash payment for accrued interest. The offer is set to expire at 5:00pm New York time today. There are $500m in 2029s outstanding. Citi and Deutsche Bank managed the 2015 sale and are dealer managers for the exchange offer.
Posted inDaily Brief
Colombia’s Popular Readies Equity Sale
Colombia’s Banco Popular is lining up the sale of a 12.11% stake in a June 10 deal that could raise $140m. The bank will offer approximately 953m shares at COP265 each on the Bogota stock exchange. It was trading at COP280 Friday. The seller of the stake is the federal government and district of Bogota, and the deal is aimed at both local and foreign investors, Daniel Isaza, manager at bookrunner Agora tells LatinFinance. Earlier this year, Popular sold 1.37% of its shares to Colombian pension funds and its own employees, Isaza adds. Colombian stockbroker Correval will act as placement agent. Grupo Aval controls 83.7% of Popular, with other Colombian states, pension funds and municipalities maintaining a minority stake.
Posted inDaily Brief
Ixe Heard Close to GMAC Buy
Mexico’s Grupo Ixe Financiera is heard close to agreeing to acquire the GMAC Financiera and GMCA Hiopotecaria units from Residential Capital. Negotiations between the niche Mexican bank and North American lender that has lost millions in the US subprime crisis were announced May 20. The assets of the combined units would be more than $1.7bn, according to S&P. This would promptly make Ixe a player in the growing Mexican mortgage market. The agency, however, has placed Ixe on credit watch negative, due to the high leverage – about MXP12bn in debt – that would come from the union.
Posted inDaily Brief
Colombia Ramps Up Capital Controls
Aiming to stem further COP strength, Colombia has increased the non-refundable deposit amount required for foreign investors in the country to 50% from 40%, the ministry of finance says. At the same time, it has established a 2 year minimum permanence requirement for FDI entering the country, the ministry adds. The measures come days after the executive manager of the Colombian central bank, Gerardo Hernandez, advocated for a more flexible framework for foreigners to invest in the country. “This is a negative development inasmuch as it moves the current policy approach from what has been seen and recognized as investment-friendly further into the heterodox camp,” says Goldman Sachs. It adds that international experience shows that capital controls seldom work, and when they do the cost attached to them can be quite significant.
Posted inDaily Brief
LatAm Equity Sees Minor Gains
LatAm equity funds gained 0.54% in the week ending May 29, according to Lipper. EM funds dropped 0.93%, while China region funds sank 2.20%. Commodities fund saw the biggest drop of the week, losing 3.33%, while global science/technology funds saw the biggest returns, with 1.88%. LatAm equity funds last week suffered redemptions, according to EPFR Global.
Posted inDaily Brief
BBVA Panama Seen Upping Loan Portfolio
S&P has revised upwards its outlook on BBVA Panama to positive from stable and affirmed the long and short-term counterparty credit ratings on the bank at BBB minus and A minus 3, respectively. “The outlook revision reflects BBVA Panama’s ability to increase its loan portfolio and deposit base in a very competitive environment, while maintaining its overall financial profile and progressively improving its business profile,” the agency says. S&P expects the shop to continue to maintain good financial performance and asset quality. “However, the ratings are constrained by a concentrated loan book and the risks of operating in Panama, such as stiff competition, high individual indebtedness, and the absence of a lender of last resort in the country,” S&P says.
Posted inMagazine
The Rise of the Iguana
Colombia’s Ecopetrol seeks to reinvent itself as a leading LatAm oil company. It is channeling investment into E&P and biofuels, backed by strong cashflow. by Julio Urdaneta
Posted inMagazine
Electrifying Peru’s Progress
The fastest growing LatAm economy faces crisis in 2011 if it does not revamp its electricity sector. However, new investment could turn Peru into a power exporter. by Lucien Chauvin